Securities Act of 1933
The foundational US law requiring disclosure of material information in connection with securities offerings.
What is Securities Act?
The Securities Act of 1933 (also called the 'Truth in Securities' act) was the first major US federal securities law, enacted after the stock market crash of 1929 and the Great Depression to restore investor confidence. Its two core requirements: (1) securities offered for public sale must be registered with the SEC (or qualify for an exemption), requiring full disclosure of material information; and (2) it prohibits deceit, misrepresentation, and fraud in the sale of securities. The Act works in tandem with the Securities Exchange Act of 1934 (which created the SEC and governs ongoing reporting) to form the foundational framework of US securities regulation. The prospectus filed as part of a registration statement is the primary disclosure document.
Example
When a company conducts an IPO, it must file a registration statement (Form S-1) with the SEC under the Securities Act of 1933 that includes audited financial statements, business description, risk factors, use of proceeds, and management information. Investors can then make informed decisions based on this mandated disclosure. Companies that misrepresent or omit material facts face civil liability under Section 11 of the Act.
Source: SEC — Securities Act of 1933